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Shifting The Power Dynamics of Philanthropy

Each year the Skoll Centre invites a small number of Oxford students to the annual Skoll World Forum on Social Entrepreneurship. Each year they share their unique perspectives of the sessions and events that unfold during this magical time in Oxford.

Philanthropy in and of itself is neither the solution nor the problem in international development. Rather, it is how we currently understand, utilize and govern philanthropy that contributes significantly to its successes and failures.

Panelist and author of Decolonizing Wealth, Edgar Villanueva, suggests that philanthropy is in a moment of reckoning. I hope he is right. The history of colonization and power dynamics inherent in today’s philanthropic system need to be recognized, grappled with and frankly, overturned.

Most of us are now familiar with stories of failed aid, and critiques of the Western philanthropic system in which wealthy or otherwise privileged people in one place make decisions about funding, development, and projects for people or organizations in a completely different place, of which they know little. The gap is in having no substantial understanding or experience with the context. “Failed aid” isn’t only applicable to the relationship between developed and developing countries – the disconnect could be continents away, or mere minutes away. Rodney Foxworth, Executive Director of BALLE, referenced the median net worth of a black American household in Boston, which is $8, compared to $247,500 for a white household. Read that again. $8. Compared to a quarter of a million dollars.

Foxworth proposes that we need to shift capital to “advance the economic interests of communities who have been excluded from, extracted from, and marginalized for centuries.”

There is a growing recognition that this kind of extreme disparity and inequality is neither logical nor just, and that it drastically fails the communities and people on the negative side of the power and wealth balance. But how can those with power begin to shift it?

Some tangible actions to rebalance power and capital seem straightforward: creating more diverse boards and teams, putting more decision making into the hands of the people who are living with the problems directly or working on the frontlines, and spending more time listening and co-designing solutions that meet the self-expressed needs of the people themselves. These principles are often at the heart of how social enterprises and non-profits seek to do their work, and yet even with these as stated goals, we often fall short as well. It is easy to skip over the time and effort that true inclusion require; it is convenient to sacrifice deep understanding for perceived efficiency and output.

Achieving a significant shift of capital, or de-colonizing wealth, requires first understanding why and how power dynamics of wealth are where they are to begin with, and admitting the injustice of how the system was built and is still maintained. More difficult, of course, is actually changing, letting go of power, and building new systems on foundations of trust. It seems clear that someone living with or working directly with a problem day in and day out will have better insight and expertise than someone who has never experienced it, and yet we often ignore or overlook this expertise in favor of those who hold money and therefore decision-making power, or even in favor of our own ideas and self-acclaimed expertise.

Trusting in other’s direct expertise, and investing in that expertise, will be key in shifting the power dynamics of philanthropy. Ultimately though, how this plays out will rely heavily on who has a seat at the tables of philanthropic and stakeholder powers. It is the responsibility of everyone in the impact and development space to create a more diverse and representative table.

To top it off, we should probably all read Villaneuva’s Decolonizing Wealth – I’ve already ordered mine!

About the Author

Julie Greene

Julie Greene is passionate about tackling issues of social injustice, with a focus on educational and economic inclusion for women. Julie has come to believe that business is one of the best tools for achieving social impact and sustainable change, and is co-founder of The Women’s Bakery, a social enterprise that trains and employs women in East Africa. 

Photo source: Skoll Foundation

Dismantling Invisible Barriers to Capital

Closing the Gap – a series of Oxford University postgraduate student insights to the Skoll World Forum 2018

Emily Durfee, 2017-18 MBA at Saïd Business School, reports on the Skoll World Forum session ‘Dismantling Invisible Barriers to Capital’.

The evidence is clear and condemning: investments of resources and support flow unevenly towards entrepreneurs who are white, male, and from wealthy countries.  These entrepreneurs have the “invisible capital,” the right skin color, gender, and nationality, to garner attention and resources from investors.  This inequity to capital perpetuates limits  to the financed perspectives and innovations within social impact, and perpetuates current inequalities and stereotypes.  The panelists in the Skoll World Forum session, “Dismantling Invisible Barriers to Capital,” posited that these disparities in investment are caused by a toxic “sameness,” and suggested three action steps to increase fairness in access to capital.

The detrimental effect of “sameness” permeated the stories of the diverse panel.  Chaired by Kathleen Kelly Janus, author of Social Startup Success, the panel included Cheryl Dorsey from Echoing Green, Marco A. Davis from New Profit, Vedika Bhandarkar from Water.org, and Halla Tomasdottir from Sisters Capital.  These speakers each focused on different issues, from incubating talented global entrepreneurs, entrepreneurs of color, or promoting female leaders.  Despite these different geographical and issue focuses, every panelist highlighted that the current system passes capital and support between people who are the “same,” either through the visible characteristics of race and gender, or through family privilege, education, or nationality.

The panel suggested that “sameness” manifests in the incubation, sourcing, and funding of entrepreneurs.  First, many entrepreneurs cannot pilot new innovations, because their families and communities lack the saved capital necessary to fund pre-investment experimentation.  Second, investors often use networks to source new investees.  However, these networks are usually homogenous, and investments based on existing networks perpetuate the power and resources of those already connected to funders and investors.  Finally, the processes for selecting entrepreneurs surface existing biases, whether for certain native language speakers, or names on resumes and pitches.  This is exacerbated by the “sameness” of internal funding structures.  For example, 94% of foundation presidents are white, 85% of their trustees are white, and 74% of their staff are white.

This “sameness” maintains and increases inequity across entrepreneurial systems, and blocks innovative solutions. To overcome it, and open investments and resources to a diverse entrepreneurship panel, the Skoll World Forum panel advocated for a multi-pronged approach of awareness, assimilation, and transformation.

First, funders must acknowledge and measure the types of inequality in their current systems.  Marco suggested that funders collect and publish data on the currently invisible biases in their systems, such as the diversity of their investment pipelines, the barriers faced by “un-same” applicants, and their own internal diversity metrics of the board, leadership, and staff.

Second, we must assimilate underrepresented groups into the current systems of funding and investment, breaking the cycle of “sameness”. Funders, incubators, and other ecosystem players must diversify the players in the room.  To do this, Hella suggested government bills to enforce diversity standards in board and leadership composition.  Hella and Marco also advocated for investor actions, such as simplifying language and requirements, providing unrestricted funding, and extending funding timelines, to improve accessibility of investments to diverse applicants.  Finally, Marco and Vedika promoted intermediary roles and events, such as “serendipity meetings” or pitch coaching, to introduce diverse entrepreneurs to existing funders.

Finally, we must transform the current systems by removing biases of “sameness”. This is a very challenging task, and there are no final or proven solutions.  However, Cheryl recommended some emerging opportunities, such as blind screening of initial applications, mindfulness training for investing staff, and leveraging AI and machine-learning algorithms to further decrease human biases.

The current invisible barriers to capital for entrepreneurs, driven by a pernicious bias towards “sameness,” prevent talented entrepreneurs from accessing critical capital and support, and limit the generation of creative and effective solutions.  The panel highlighted that the solutions to these underlying biases are multi-faceted, and evolving, and called each of us to act on the above steps, and to innovate new opportunities to overcome “sameness” and promote investment equality.

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Proximate Philanthropy

Closing the Gap – a series of Oxford University postgraduate student insights to the Skoll World Forum 2018

Kim Scriven, 2017-18 MBA at Saïd Business School, covers the Skoll World Forum session on ‘Proximate Philanthropy: Exploring Power and Privilege in the Funding Landscape’

The focus of this year’s forum is the Power of Proximity, and this was the starting point for a panel that cut to the heart of one of the central relationships in social entrepreneurship: that between those who seek to drive change in the world and those with the means to fund and support such action.

Kicking off the panel, moderator Pia Infante of the Whitman Institute brought the assembled audience back to the inspiring words of Bryan Stevenson in Tuesday’s opening plenary, arguing that ‘Proximate Philanthropy’ was essential for enabling the “bold, inconvenient and uncomfortable acts” that our moment requires. Achieving such bold action will entail that discomfort and inconvenience be shared by funders, not just felt by social entrepreneurs on the frontlines of social change.

But what exactly does proximity mean in the relationship between funders and social entrepreneurs? Jessamyn Shams-Lau, Executive Director of the Peery Foundation, highlighted efforts to foster interactions that strengthen a grantee’s ability to achieve their outcomes. These efforts are built around five core practices, starting from the internal culture of the funder, using this to actively research and pursue opportunities and provide unrestricted, multiyear funding, backed by tailored additional support. Underpinning this is the need for accountability and active communication between funder and grantee.

Vu Le of NonprofitAF.com was more prosaic: sometimes proximity is simple and physical – about donors being prepared to leave their comfortable offices and meet people working where the problems are. Parminder Vir argued forcefully that proximity is not simply about attitude or place, it is about the authenticity that comes from being born out of the world in which a funder focuses its action – with an appreciation of context, place, and history. As CEO of the Tony Elumelu Foundation, for Vir this means being based in Lagos, Nigeria, and working with an awareness of the ongoing impact of colonialism on the country, the continent, and its people.

And this cuts to the heart of the whole debate – in the room and beyond – that philanthropy and efforts to foster social change are inescapably embedded in systems of power and politics. In the case of funders, this inherently means that they have the greater power and agency in their relationships with grantees and recipients. These power imbalances are heightened when they reflect broader social inequalities and injustices – be they about race, sex or history.

At times the conversation focused on familiar ground in debates about how best to fund social action. Is the broad approach of the Tony Elumelu Foundation – generating tens of thousands of applications from as far and wide as possible – more equitable than a more targeted and active sourcing approach pursued by the Peery Foundation? Should funders seek short but tailored applications, or just accept a standard pitch?

The answers to such questions will always be context specific and there can be no one-size-fits-all approach to proximate philanthropy. More importantly, to get too focused on these details risks missing the broader point – that funders need not just to be aware of their position of power and privilege, but continually seek to recognise and address the implications.

And this brings us back to the discomfort and inconvenience that we will need to confront. Vu Le decried the fact that “the way we treat non-profits is the same as the way we treat poor people in society’ too often lacking the trust and empathy needed to build meaningful and sustainable relationships that can lead to impact. This is perhaps the crux of the proximity challenge in philanthropy, bridging inequalities in power and resource by taking the time and inconvenience to foster relationship built on mutual respect and understanding.

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Finding Common Ground Between the Financing Fault Lines

Forging Common Ground – Series of Oxford Student Insights to the Skoll World Forum 2017.

 Skoll Scholar and Oxford MBA Candidate 2016-17, Ashley Thomas, draws on this year’s Skoll World Forum theme in relation to social impact business models.

There is a fault line between models of international development financing. On one side, there is the traditional donor and philanthropic capital that utilises grant money to support projects. On the other side is the social enterprise space that seeks to create sustainable impact through revenue generation.  There has been a lot of excitement in utilising grant funding for social enterprises to build and tweak their business model, but to date there has been little appetite for true hybrid models of ongoing subsidies for social enterprises.

This is a conversation that I had in numerous sessions and coffees throughout Skoll World Forum. It was also one of the key themes from the session hosted by Mercy Corps and USAID on sharing the learnings from their investments in the Innovation Investment Alliance. There is a common ground emerging; these conversations are hinting at the start of innovative new business models that allow for hybrid grant and revenue streams.

The Problem:

Social enterprises are addressing market failures. They bring products or services to underserved markets, often at low margins, and often at high costs. However, market failures exist for a reason; many companies are realising that even at scale, high volume low margin products are not able to generate the revenues that are necessary to be sustainable. However, social enterprises often sell themselves on this vision- that with initial capital to pilot and build systems, they will be financially sustainable at scale.

The Solution:

Philanthropic capital- which does not require financial returns, can help bridge this fault line, and maximise the potential impact of social enterprises. This does not mean we should revert to the large scale unsustainable development models of the 1990’s, but use philanthropic capital as way of targeting the market failure and allowing social enterprises to maintain their focus on their mission and outcomes. This hybrid model is being utilised in the FundiFix hand pump repair service designed by Dr. Rob Hope out of the University of Oxford. The model uses monthly user subscription payments to pool capital to finance prompt hand pump repairs. However, the willingness to pay only accounts for 2/3 of the cost of the service, and the remaining cost is subsidised through grant funding. This is also used in much larger social enterprises.  Ella Gudwin from Vision Spring spoke about how their model has shifted from seeking to maintain cost recovery- and retailing glasses at increasingly higher prices, to minimising the “philanthropy per pair” and serving their target customer.  They were able to do this under a scaling innovation grant from USAID and Mercy Corps, demonstrating that donors are also recognising the need for the pivot into these hybrid models.

It is increasingly clear that there is not one single model for social enterprise, and a single-minded focus on achieving commercial sustainability may limit the impact. Innovative hybrid models that use the social enterprise ethos of cost effectiveness in combination with smart grant funding that can subsidise the product can address the market failures preventing social enterprises achieving impact at scale. There is immense opportunity to achieve scale and impact through creating this common ground.

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Philanthropy for a Fractured World

Forging Common Ground – Series of Oxford Student Insights to the Skoll World Forum 2017.

David Sanders, Oxford MBA at the Saïd Business School, gives his perspective on the Skoll World Forum session, “Philanthropy for a Fractured World”.

On the final morning of the 2017 Skoll World Forum, simultaneous panels were offered on Impact Investing and Philanthropy.  I debated whether to catch up on the latest from the former, with its sex appeal of “profit + purpose”, a proposed new kind of capitalism, or to return to the original solution for affecting positive change: strategic donations.

A simple realisation drew me to Philanthropy for a Fractured World:  the most pressing, extreme problems facing society today do not lend themselves to viable business models, but through giving, these issues can be remedied.

Foundations and family offices are increasingly seeking hybrid organisational models when deploying capital, and I expected the session on philanthropy to at least touch on this growing practice.  Much to my surprise, and relief, on the contrary, the panelists reminded the packed room that philanthropy has a unique, and extremely important role to play in the social impact space.

Panelists at the Skoll World Forum, from philanthropy and government, discuss the role of their organisations in an increasingly polarised society.

Panelists at the Skoll World Forum, from philanthropy and government, discuss the role of their organisations in an increasingly polarised society.

The speakers, who included Lillianne Ploumen from the Government of The Netherlands, Darren Walker from the Ford Foundation, Laleh Ispahani from Open Society Foundations and Pia Infante from the Whitman Institute, discussed their organisations’ respective responses to crises, with significant focus paid to the risks facing women and minorities in the U.S. under a Trump presidency.  Ms. Ploumen’s department has partnered on the #SheDecides campaign, which swiftly raised €183 million to help fill the gap in maternal health provisions following the president’s drastic cuts to Planned Parenthood services.  This initiative, from a foreign government to the U.S., is admirable, but indeed troublesome—it seems the U.S. is entering a period of international reliance for the protection of human rights.

Mr. Walker emphasised the importance of minority representation in leadership positions today, especially where racism and sexism persist, and he also cited specific concerns on the failure of the economy to deliver stable jobs to low-income populations.  These shortcomings, coupled with a shrinking government social mandate, escalates demand for Big Philanthropy.

While the panelists focused more on the role of philanthropy than they did on specific causes, a highlight of the conversation was a recognition that there are causes that span the political spectrum.  Disability issues and criminal justice-reform, to name two, are both values-based issues, and garner support from the right-leaning Koch brothers, and progressive institutions like Open Society Foundations.

The world of giving does grapple with some important questions, however, around its own identity and purpose.  As Mr. Walker acknowledged, philanthropists are incredibly privileged, and it is easy for practitioners to succumb to an ivory tower mentality.  One proposed solution to this, as posed by the distinguished moderator Marc Gunther from Nonprofit Circles, is to democratise the work.  Like shareholders of a public company, who convene regularly to take a voice in key decisions, should not beneficiaries to causes also be gathered to express their views to donors?

In the Trump era, the culture of giving in the U.S. plays an essential role for social progress and human protections.  And it seems, based on the views of those at the Skoll World Forum, philanthropy is stepping into its heightened role with a determined spirit.

Follow David: @DavidSandersUSA

 

Advancing Good Governance Seminar: Fancy Alliteration or Food for Action?

The Skoll Centre recently partnered with Linklaters, no rx Camfed, purchase and the Blavatnik School for Government to host the 1st annual seminar on Advancing Good Governance in International Development.  The theme this year was “accountability to the client.”

The spotlight focused on how organisations operating in the social sector can enhance responsiveness and accountability to its clients. But what does “client” really mean?  Are we talking beneficiaries, stakeholders, funders, partnering organisations? How do we make sure we are “accountable” to each of them, and all of them collectively, but which “them” do we put first?  This seminar was designed to explore and unpack precisely these complexities, and sparked some lively discussions.

Whether you are a social entrepreneur or policy maker, I think we all agree the field of international development, let alone achieving good governance within it, is complex.  However, there is hope. The seminar not only got folks talking, but went beyond providing food for thought and unveiled an effort to take action.  It put academics and practitioners in the same room and started to identify gaps and possible solutions/practices that need to be explored further.  These areas are being evaluated as we speak and a call for papers to address gaps in the existing literature is forthcoming (with a £20K stipend slated to go to the winner).

Of course a simple call for papers won’t solve the complexity of governance, but it is a start.  And it will serve as an impetus for the conversation until the second annual seminar next year.